Thai feeder operator Regional Container Lines (RCL) said that stiffer competition caused by several liner operators adding calls to Southeast Asia amid US-China trade tensions, has resulted in its reduced freight income.
The company transports both carrier-owned and shipper-owned containers, but it suffered a wider net loss of US$16.48 million in 2019, from US$10.38 million in 2018.
Container News reported recently that as manufacturers shifted some production from China to Vietnam to avoid US tariffs, intra-Asia liner operators have been adding more calls to Vietnam, resulting in downward pressure on freight rates.
RCL’s managing director Sumate Tanthuwanit said, “Despite lifting growth, a prolonged trade dispute between China and the US had posed disruption to the global supply chain where Southeast Asia has been targeted as a replacement source, for various Chinese goods. Liner operators had realised the regional potential and inserted new tonnage, which forced down the freight rate per TEU in 2019.”
RCL’s freight revenue in 2019 was US$530.28 million, down from US$551.4 million in 2018, even though the company’s container volumes were up 3% year-on-year, to 2,183,995 TEU. Contributing to the loss was lower gains on asset sales in 2019.
Sumate said that the company strove to reduce costs by using big data analytics to reduce expenses by 4% from 2018, to US$591.33 million. RCL also incurred higher finance costs after taking delivery of the last of two newbuildings the company had contracted with Chinese shipbuilder Yangzijiang Shipbuilding in November 2015.
The vessels, delivered from August 2018 to July 2019, are Jaru Bhum, Khuna Bhum, Lalit Bhum and Makha Bhum. RCL now operates 29 ships with total capacity of 54,471 TEU, comprising 22 owned vessels and nine chartered vessels, according to Alphaliner.
Martina Li
Asia Correspondent
